1-1     By:  Oliveira, Dukes, et al.                          H.B. No. 3032
 1-2          (Senate Sponsor - Barrientos)
 1-3           (In the Senate - Received from the House May 13, 1999;
 1-4     May 14, 1999, read first time and referred to Committee on Finance;
 1-5     May 14, 1999, reported favorably by the following vote:  Yeas 9,
 1-6     Nays 0; May 14, 1999, sent to printer.)
 1-7                            A BILL TO BE ENTITLED
 1-8                                   AN ACT
 1-9     relating to historically underutilized businesses; providing a
1-10     penalty.
1-11           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-12           SECTION 1.  Section 2155.074(g), Government Code, as added by
1-13     Chapter 508, Acts of the 75th Legislature, Regular Session, 1997,
1-14     is amended to read as follows:
1-15           (g)  A state agency shall post in the business daily either
1-16     the entire bid or proposal solicitation package or a notice that
1-17     includes all information necessary to make a successful bid,
1-18     proposal, or other applicable expression of interest for the
1-19     procurement contract, including at a minimum the following
1-20     information for each procurement that the state agency will make
1-21     that is estimated to exceed $25,000 in value:
1-22                 (1)  a clear and complete [brief] description of the
1-23     goods or services to be procured and any applicable state product
1-24     or service codes for the goods and services;
1-25                 (2)  the last date on which bids, proposals, or other
1-26     applicable expressions of interest will be accepted;
1-27                 (3)  the estimated quantity of goods or services to be
1-28     procured;
1-29                 (4)  if applicable, the previous price paid by the
1-30     state agency for the same or similar goods or services;
1-31                 (5)  the estimated date on which the goods or services
1-32     to be procured will be needed; and
1-33                 (6)  the name, business mailing address, and business
1-34     telephone number of the state agency employee a person may contact
1-35     to inquire about [obtain] all necessary information related to
1-36     making a bid or proposal or other  applicable expression of
1-37     interest for the procurement contract.
1-38           SECTION 2.  Subchapter A, Chapter 2161, Government Code, is
1-39     amended by adding Section 2161.0015 to read as follows:
1-40           Sec. 2161.0015.  DETERMINING SIZE STANDARDS FOR HISTORICALLY
1-41     UNDERUTILIZED BUSINESSES.  The commission may establish size
1-42     standards that a business may not exceed if it is to be considered
1-43     a historically underutilized business under this chapter.  In
1-44     determining the size standards, the commission shall determine the
1-45     size at which a business should be considered sufficiently large
1-46     that the business probably does not significantly suffer from the
1-47     effects of past discriminatory practices.
1-48           SECTION 3.  Subchapter A, Chapter 2161, Government Code, is
1-49     amended by adding Section 2161.003 to read as follows:
1-50           Sec. 2161.003.  TRANSFER OF FUNDS FOR PURCHASING.  (a)  The
1-51     commission and the state auditor shall cooperate to develop
1-52     procedures to periodically monitor state agency compliance with
1-53     Section 2161.123.  The state auditor shall report to the commission
1-54     a state agency that is not complying with that section.
1-55           (b)  If the state auditor reports to the commission that a
1-56     state agency is not complying with Section 2161.123, the commission
1-57     shall report that fact to the Legislative Budget Board.  If the
1-58     Legislative Budget Board determines that, one year after the date
1-59     of the state auditor's report to the commission, the agency is
1-60     still not complying with Section 2161.123, the budget board may,
1-61     under Section 69, Article XVI, Texas Constitution, direct the
1-62     emergency transfer of the agency's appropriated funds for making
1-63     purchases under purchasing authority delegated under Section
1-64     2155.131 or 2155.133 to the appropriate state agency.  The amount
 2-1     transferred from the agency's funds to the appropriate agency shall
 2-2     be an amount determined by the Legislative Budget Board.
 2-3           SECTION 4.  Sections 2161.061(b) and (c), Government Code,
 2-4     are amended to read as follows:
 2-5           (b)  As one [part] of its certification procedures, the
 2-6     commission may:
 2-7                 (1)  approve the [another] certification program of one
 2-8     or more local governments in this state that certify [certifies]
 2-9     historically underutilized businesses, minority business
2-10     enterprises, women's business enterprises, or disadvantaged
2-11     business enterprises under substantially the same definition, to
2-12     the extent applicable, used by Section 2161.001; and
2-13                 (2)  certify a business certified under the local
2-14     government program as a historically underutilized business under
2-15     this chapter.
2-16           (c)  To maximize the number of certified historically
2-17     underutilized businesses, the commission shall enter into
2-18     agreements with local governments in this state that conduct
2-19     certification programs described by Subsection (b).  The agreements
2-20     must take effect immediately and:
2-21                 (1)  allow for automatic certification of businesses
2-22     certified under the local government program;
2-23                 (2)  provide for the efficient updating of the
2-24     commission database containing information about historically
2-25     underutilized businesses and potential historically underutilized
2-26     businesses; and
2-27                 (3)  provide for a method by which the commission may
2-28     efficiently communicate with businesses certified under the local
2-29     government program and provide those businesses with information
2-30     about the state historically underutilized business program.  [A
2-31     municipality, in certifying historically underutilized businesses,
2-32     may adopt the certification program of the commission, of the
2-33     federal Small Business Administration, or of another political
2-34     subdivision or other governmental entity.]
2-35           SECTION 5.  Section 2161.062, Government Code, is amended by
2-36     adding Subsections (d) and (e) to read as follows:
2-37           (d)  The commission shall send historically underutilized
2-38     businesses an orientation package on certification or
2-39     recertification.  The package shall include:
2-40                 (1)  a certificate issued in the historically
2-41     underutilized business's name;
2-42                 (2)  a description of the significance and value of
2-43     certification;
2-44                 (3)  a list of state purchasing personnel;
2-45                 (4)  information regarding electronic commerce
2-46     opportunities;
2-47                 (5)  information regarding the Texas Marketplace
2-48     website; and
2-49                 (6)  additional information about the state procurement
2-50     process.
2-51           (e)  A state agency with a budget that exceeds $5 million
2-52     during a state fiscal year shall designate a staff member to serve
2-53     as the historically underutilized businesses coordinator for the
2-54     agency during the fiscal year.  The procurement director may serve
2-55     as the coordinator.  In agencies that employ a historically
2-56     underutilized businesses coordinator, the position of coordinator,
2-57     within the agency's structure, must be at least equal to the
2-58     position of procurement director.  The coordinator shall:
2-59                 (1)  coordinate training programs for the recruitment
2-60     and retention of historically underutilized businesses;
2-61                 (2)  report required information to the commission; and
2-62                 (3)  match historically underutilized businesses with
2-63     key staff within the agency.
2-64           SECTION 6.  Section 2161.063(b), Government Code, is amended
2-65     to read as follows:
2-66           (b)  The commission shall assist the Texas Department of
2-67     Economic Development [Commerce] in performing the department's
2-68     duties under Section 481.0068 [481.103].
2-69           SECTION 7.  Section 2161.064(b), Government Code, is amended
 3-1     to read as follows:
 3-2           (b)  The commission at least semiannually shall update the
 3-3     directory and provide access to the directory electronically or in
 3-4     another form [a copy of the directory] to each state agency.
 3-5           SECTION 8.  Sections 2161.121(a) and (e), Government Code,
 3-6     are amended to read as follows:
 3-7           (a)  The commission shall prepare a consolidated report that:
 3-8                 (1)  includes the number and dollar amount of contracts
 3-9     awarded and paid to historically underutilized businesses certified
3-10     by the commission; [and]
3-11                 (2)  analyzes the relative level of opportunity for
3-12     historically underutilized businesses for various categories of
3-13     acquired goods and services; and
3-14                 (3)  tracks, by vendor identification number and, to
3-15     the extent allowed by federal law, by social security number, the
3-16     graduation rates for historically underutilized businesses that
3-17     grew to exceed the size standards determined by the commission.
3-18           (e)  The commission shall send on October 15 of each year a
3-19     report on the preceding fiscal year to the presiding officer of
3-20     each house of the legislature[, the members of the legislature,]
3-21     and the joint committee.
3-22           SECTION 9.  Subchapter B, Chapter 2161, Government Code, is
3-23     amended by adding Sections 2161.065 and 2161.066 to read as
3-24     follows:
3-25           Sec. 2161.065.  MENTOR-PROTEGE PROGRAM.  (a)  The commission
3-26     shall design a mentor-protege program to foster long-term
3-27     relationships between prime contractors and historically
3-28     underutilized businesses and to increase the ability of
3-29     historically underutilized businesses to contract with the state or
3-30     to receive subcontracts under a state contract.  Each state agency
3-31     shall implement the program designed by the commission.
3-32           (b)  The program must be designed so that each state agency
3-33     is directed to offer appropriate points or other incentives to its
3-34     contractors in connection with any agency contract that offers
3-35     subcontracting opportunities if the contractor agrees to and is
3-36     successful in:
3-37                 (1)  subcontracting with a historically underutilized
3-38     business in performing the contract; and
3-39                 (2)  providing business and developmental assistance to
3-40     the historically underutilized business subcontractor that is
3-41     designed to increase the historically underutilized business's
3-42     technical and business capabilities to perform more complex work.
3-43           (c)  Participation in the program must be voluntary for both
3-44     the contractor and the historically underutilized business
3-45     subcontractor.
3-46           Sec. 2161.066.  HISTORICALLY UNDERUTILIZED BUSINESS FORUMS.
3-47     (a)  The commission shall design a program of forums in which
3-48     historically underutilized businesses are invited by state agencies
3-49     to deliver technical and business presentations that demonstrate
3-50     their capability to do business with the agency:
3-51                 (1)  to senior managers and procurement personnel at
3-52     state agencies that acquire goods and services of a type supplied
3-53     by the historically underutilized businesses; and
3-54                 (2)  to contractors with the state who may be
3-55     subcontracting for goods and services of a type supplied by the
3-56     historically underutilized businesses.
3-57           (b)  The forums shall be held at state agency offices.
3-58           (c)  Each state agency shall participate in the program by
3-59     sending senior managers and procurement personnel to attend
3-60     relevant presentations and by informing the agency's contractors
3-61     about presentations that may be relevant to anticipated
3-62     subcontracting opportunities.
3-63           (d)  Each state agency that has a historically underutilized
3-64     businesses coordinator shall:
3-65                 (1)  design its own program and model the program to
3-66     the extent appropriate on the program developed by the commission
3-67     under this section; and
3-68                 (2)  sponsor presentations by historically
3-69     underutilized businesses at the agency.
 4-1           (e)  The commission shall sponsor presentations given at
 4-2     locations that can easily be attended by representatives of and
 4-3     contractors with state agencies that do not have a historically
 4-4     underutilized businesses coordinator.
 4-5           (f)  The commission and each state agency that has a
 4-6     historically underutilized businesses coordinator shall
 4-7     aggressively identify and notify individual historically
 4-8     underutilized businesses regarding opportunities to make a
 4-9     presentation regarding the types of goods and services supplied by
4-10     the historically underutilized business and shall advertise in
4-11     appropriate trade publications that target historically
4-12     underutilized businesses regarding opportunities to make a
4-13     presentation.
4-14           SECTION 10.  Section 2161.122(c), Government Code, is amended
4-15     to read as follows:
4-16           (c)  A state agency participating in a group purchasing
4-17     program [described under Section 2155.139(b)] shall send to the
4-18     commission in the agency's report under Section 2161.121 a separate
4-19     list of purchases from historically underutilized businesses that
4-20     are made through the group purchasing program, including the dollar
4-21     amount of each purchase allocated to the reporting agency.
4-22           SECTION 11.  Subchapter C, Chapter 2161, Government Code, is
4-23     amended by adding Sections 2161.126 and 2161.127 to read as
4-24     follows:
4-25           Sec. 2161.126.  EDUCATION AND OUTREACH BY COMMISSION.  Before
4-26     September 1 of each year, the commission shall report to the
4-27     governor, the lieutenant governor, and the speaker of the house of
4-28     representatives on the education and training efforts that the
4-29     commission has made toward historically underutilized businesses.
4-30     The report must include the following as related to historically
4-31     underutilized businesses:
4-32                 (1)  the commission's vision, mission, and philosophy;
4-33                 (2)  marketing materials and other educational
4-34     materials distributed by the commission;
4-35                 (3)  the commission's policy regarding education,
4-36     outreach, and dissemination of information;
4-37                 (4)  goals that the commission has attained during the
4-38     fiscal year;
4-39                 (5)  the commission's goals, objectives, and expected
4-40     outcome measures for each outreach and education event; and
4-41                 (6)  the commission's planned future initiatives on
4-42     education and outreach.
4-43           Sec. 2161.127.  LEGISLATIVE APPROPRIATIONS REQUESTS.  Each
4-44     state agency must include as part of its legislative appropriations
4-45     request a detailed report for consideration by the budget
4-46     committees of the legislature that shows the extent to which the
4-47     agency met the applicable historically underutilized business
4-48     contracting goals established by this chapter and by rules of the
4-49     commission during the two calendar years preceding the calendar
4-50     year in which the request is submitted.  If a state agency did not
4-51     meet an applicable goal, the report must demonstrate the reasons
4-52     for that fact.  The extent to which a state agency meets applicable
4-53     goals is considered a performance measure for purposes of the
4-54     appropriations process.
4-55           SECTION 12.  Chapter 2161, Government Code, is amended by
4-56     adding Subchapter F to read as follows:
4-57                        SUBCHAPTER F.  SUBCONTRACTING
4-58           Sec. 2161.251.  APPLICABILITY.  (a)  This subchapter applies
4-59     to all contracts entered into by a state agency with an expected
4-60     value of $100,000 or more, including:
4-61                 (1)  contracts for the acquisition of a good or
4-62     service; and
4-63                 (2)  contracts for or related to the construction of a
4-64     public building, road, or other public work.
4-65           (b)  This subchapter applies to the contract without regard
4-66     to:
4-67                 (1)  whether the contract is otherwise subject to this
4-68     subtitle; or
4-69                 (2)  the source of funds for the contract, except that
 5-1     to the extent federal funds are used to pay for the contract, this
 5-2     subchapter does not apply if federal law prohibits the application
 5-3     of this subchapter in relation to the expenditure of federal funds.
 5-4           Sec. 2161.252.  AGENCY DETERMINATION REGARDING SUBCONTRACTING
 5-5     OPPORTUNITIES; BUSINESS SUBCONTRACTING PLAN.  (a)  Each state
 5-6     agency that considers entering into a contract with an expected
 5-7     value of $100,000 or more shall, before the agency solicits bids,
 5-8     proposals, offers, or other applicable expressions of interest from
 5-9     prospective contractors, determine whether it is probable that
5-10     there will be subcontracting opportunities under the contract. If
5-11     the state agency determines that there is that probability, the
5-12     agency in its request for bids, proposals, offers, or other
5-13     applicable expressions of interest regarding the contract shall
5-14     require that each bid, proposal, offer, or other applicable
5-15     expression of interest include a historically underutilized
5-16     business subcontracting plan.
5-17           (b)  If the state agency determines that there is the
5-18     probability for subcontracting opportunities under the contract,
5-19     the agency also shall determine the extent to which historically
5-20     underutilized businesses will be available to enter into the
5-21     subcontracts. The state agency shall make this determination based
5-22     on the types of subcontracting opportunities available under the
5-23     contract together with the agency's knowledge of the relevant
5-24     market, any relevant disparity study conducted by or for a
5-25     governmental entity that contains information on the availability
5-26     of historically underutilized businesses to perform the types of
5-27     subcontracted work in the relevant locality, and other relevant
5-28     information the agency considers to be reliable.  Given the
5-29     expected value of the subcontracting opportunities and its
5-30     determination regarding the availability of historically
5-31     underutilized businesses to perform the subcontracted work, the
5-32     state agency shall state the historically underutilized business
5-33     subcontracting participation level for the contract expressed as a
5-34     percentage of the expected dollar value of the contract. The state
5-35     agency shall include the participation level in its request for
5-36     bids, proposals, offers, or other applicable expressions of
5-37     interest.
5-38           (c)  When a state agency requires a historically
5-39     underutilized business subcontracting plan under Subsection (a), a
5-40     bid, proposal, offer, or other applicable expression of interest
5-41     from a prospective contractor must contain a plan that meets the
5-42     requirements of this section to be considered responsive.
5-43           (d)  The historically underutilized business subcontracting
5-44     plan is considered to be part of the bid, proposal, offer, or other
5-45     applicable expression of interest. The plan must include:
5-46                 (1)  the historically underutilized business
5-47     subcontracting participation level that the prospective contractor
5-48     expects to meet, expressed as a percentage of the expected dollar
5-49     amount of the contract;
5-50                 (2)  the name of each historically underutilized
5-51     business with which the prospective contractor expects to
5-52     subcontract;
5-53                 (3)  the part of the work that each of those expected
5-54     subcontractors would perform;
5-55                 (4)  the expected dollar value of each of those
5-56     subcontracts; and
5-57                 (5)  information about the methods used in the past and
5-58     currently used by the prospective contractor to identify, contact,
5-59     and evaluate available historically underutilized businesses with
5-60     which to subcontract.
5-61           (e)  If the historically underutilized business
5-62     subcontracting participation level stated in the prospective
5-63     contractor's plan is less than the state agency's stated
5-64     participation level for the contract, the plan must account for
5-65     that fact. The plan must demonstrate the reason, in the prospective
5-66     contractor's opinion, that there is an insufficient number of
5-67     historically underutilized businesses available in the locality at
5-68     that time to allow the state agency's stated participation level to
5-69     be met.
 6-1           Sec. 2161.253.  AGENCY EVALUATION OF BUSINESS SUBCONTRACTING
 6-2     PLAN.  (a)  A state agency that has required each bid, proposal,
 6-3     offer, or other applicable expression of interest for the contract
 6-4     to include a historically underutilized business subcontracting
 6-5     plan may not award the contract to a prospective contractor who did
 6-6     not include a plan that complies with Section 2161.252.
 6-7           (b)  In determining which bid, proposal, offer, or other
 6-8     applicable expression of interest offers the best value to the
 6-9     state or is the lowest and best responsible bid or proposal, the
6-10     state agency shall evaluate and consider the merits of each
6-11     prospective contractor's historically underutilized business
6-12     subcontracting plan.
6-13           Sec. 2161.254.  REQUIRED CONTRACT CLAUSES.  (a)  A contract
6-14     awarded by a state agency that has required each bid, proposal,
6-15     offer, or other applicable expression of interest for the contract
6-16     to include a historically underutilized business subcontracting
6-17     plan must include the contract clauses described by this section.
6-18           (b)  The historically underutilized business subcontracting
6-19     plan submitted by the prospective contractor receiving the contract
6-20     is considered to be part of the contract. The historically
6-21     underutilized business subcontracting participation level expressed
6-22     in the plan as a percentage of the expected dollar amount of the
6-23     contract is considered to be part of the contract, except that if
6-24     negotiations were allowed under other law and the prospective
6-25     contractor and the state agency agreed on a different percentage
6-26     subcontracting participation level during negotiations before the
6-27     contract was awarded, the negotiated participation level is
6-28     considered to be part of the contract.
6-29           (c)  The contract must require quarterly reports on the
6-30     progress the contractor is making in meeting the overall
6-31     participation level of the historically underutilized business
6-32     subcontracting plan. The quarterly reports must generally describe,
6-33     in the manner prescribed by the state agency, the progress being
6-34     made in meeting the participation level.  The quarterly reports
6-35     must also specifically report:
6-36                 (1)  whether the historically underutilized businesses
6-37     named in the subcontracting plan as businesses with which the
6-38     contractor expected to subcontract actually received the expected
6-39     subcontracts, and if not:
6-40                       (A)  the reasons for that fact; and
6-41                       (B)  the efforts that the contractor made to find
6-42     another historically underutilized business that was available and
6-43     would be interested in the subcontract;
6-44                 (2)  the cumulative dollar value of subcontracts
6-45     awarded to historically underutilized businesses under the contract
6-46     to date; and
6-47                 (3)  the percentage of the cumulative amount the
6-48     contractor has spent under the contract to date as payments to
6-49     historically underutilized business subcontractors under the
6-50     contract.
6-51           (d)  The contract must include a clause that outlines and
6-52     describes the requirements of the state's historically
6-53     underutilized business subcontracting program.
6-54           (e)  The contract must include a penalties clause that
6-55     requires the contractor to pay penalties to the state after the
6-56     contract is completed if:
6-57                 (1)  the value of subcontracts awarded under the
6-58     contract to historically underutilized businesses did not meet or
6-59     exceed the historically underutilized business subcontracting
6-60     participation level that is part of the contract; and
6-61                 (2)  the participation level was not met at least in
6-62     part because the contractor did not make a good faith effort to
6-63     meet the participation level.
6-64           (f)  The amount of the penalties is computed by subtracting
6-65     the value of subcontracts awarded under the contract to
6-66     historically underutilized businesses from the historically
6-67     underutilized business subcontracting participation level that is
6-68     part of the contract.
6-69           Sec. 2161.255.  DETERMINING WHETHER TO ASSESS PENALTIES.
 7-1     (a)  After the contract is completed, the purchasing personnel of
 7-2     the state agency shall determine whether the value of subcontracts
 7-3     awarded under the contract to historically underutilized businesses
 7-4     met or exceeded the historically underutilized business
 7-5     subcontracting participation level that was part of the contract.
 7-6     If it is determined that the contractor failed to meet or exceed
 7-7     the participation level, the state agency shall notify the
 7-8     contractor of that determination.
 7-9           (b)  The state agency shall give the contractor ample
7-10     opportunity to submit documentation and to explain in discussions
7-11     with state agency purchasing personnel that the failure to meet or
7-12     exceed the participation level is not attributable to a lack of
7-13     good faith effort on the part of the contractor to meet the
7-14     participation level.
7-15           (c)  In determining the extent to which the contractor made a
7-16     good faith effort to meet the participation level, the state
7-17     agency's purchasing personnel shall consider factors indicating
7-18     good faith, such as whether the contractor:
7-19                 (1)  provided timely notice of a subcontracting
7-20     opportunity to historically underutilized businesses that have the
7-21     ability to perform the subcontract and that may be interested in
7-22     receiving the subcontract;
7-23                 (2)  advertised the subcontracting opportunity in all
7-24     media that focus on serving one or more kinds of historically
7-25     underutilized businesses;
7-26                 (3)  effectively used the services of minority, women,
7-27     and community organization contractor groups, local, state, and
7-28     federal business assistance offices, and other organizations that
7-29     provide assistance in identifying historically underutilized
7-30     businesses that have the ability to perform the subcontract;
7-31                 (4)  divided subcontract work or purchases into the
7-32     smallest reasonable units to enhance the possibility of
7-33     historically underutilized business participation in the
7-34     subcontracting opportunity; and
7-35                 (5)  awarded a subcontract to the historically
7-36     underutilized business that qualified as the lowest responsible
7-37     bidder or offeror or, for negotiated subcontracts, negotiated in
7-38     good faith with interested historically underutilized businesses.
7-39           (d)  If, after considering the documentation and explanations
7-40     submitted by the contractor, the state agency's officer or employee
7-41     in charge of procurement finds that the contractor did not meet the
7-42     participation level because of a lack of good faith effort on the
7-43     part of the contractor, that officer or employee shall report that
7-44     finding to the administrative head of the agency.  The
7-45     administrative head may then  initiate a contested case proceeding
7-46     to assess the penalty under Chapter 2001.  If the agency's final
7-47     order in the contested case assesses the penalty, the contractor is
7-48     entitled to judicial review of the final order.
7-49           (e)  The enforcement of the penalty may be stayed during the
7-50     time the order is under judicial review if the person pays the
7-51     penalty to the clerk of the court or files a supersedeas bond with
7-52     the court in the amount of the penalty.  A person who cannot afford
7-53     to pay the penalty or file the bond may stay the enforcement by
7-54     filing an affidavit in the manner required by the Texas Rules of
7-55     Civil Procedure for a party who cannot afford to file security for
7-56     costs, subject to the right of the agency to contest the affidavit
7-57     as provided by those rules.
7-58           (f)  Penalties under this section are payable to the state
7-59     agency, which shall send the money to the comptroller for deposit
7-60     in the unobligated and undedicated portion of the general revenue
7-61     fund.
7-62           SECTION 13.  Section 2161.231, Government Code, is amended to
7-63     read as follows:
7-64           Sec. 2161.231.  PENALTY.  (a)  A person commits an offense if
7-65     the person:
7-66                 (1)  intentionally applies as a historically
7-67     underutilized business for an award of a purchasing contract or
7-68     public works contract under this subtitle; and
7-69                 (2)  knows the person is not a historically
 8-1     underutilized business.
 8-2           (b)  A person commits an offense if the person:
 8-3                 (1)  intentionally applies as a historically
 8-4     underutilized business for an award of a subcontract under a
 8-5     purchasing contract or public works contract with a state agency
 8-6     under this subtitle or other law; and
 8-7                 (2)  knows the person is not a historically
 8-8     underutilized business.
 8-9           (c)  An offense under this section is a third degree felony.
8-10           SECTION 14.  (a)  This Act takes effect September 1, 1999.
8-11           (b)  Subchapter F, Chapter 2161, Government Code, as added by
8-12     this Act, applies only to subcontracting under a contract entered
8-13     into by a state agency for which the request for bids, proposals,
8-14     offers, or other applicable expressions of interest is published or
8-15     otherwise disseminated on or after that date.
8-16           SECTION 15.  The importance of this legislation and the
8-17     crowded condition of the calendars in both houses create an
8-18     emergency and an imperative public necessity that the
8-19     constitutional rule requiring bills to be read on three several
8-20     days in each house be suspended, and this rule is hereby suspended.
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